The deal, announced earlier this month and initially expected to close in October, provides the newly-combined company with surface and mineral rights for thermal coal in Montana’s Bull Mountain region as well as met reserves in Colombia.
The company will retain the name Management Energy, with combined rights to 345 million tons of surface rights and 83Mt of mineral rights, including the Carpenter Creek mine in Montana. Also included are 43Mt of low ratio coal at the neighboring Snider Ranch prospect.
“Carpenter Creek and Snider Ranch are two of the last high-BTU, low-sulfur deposit bases remaining in the Western US,” company officials said.
“These coal characteristics are highly desirable in the global export market. [We are] in the process of obtaining the necessary surface mining permits to begin production.”
Also under the deal, former MCCH managing member and founder Jack Hanks has been named chairman and chief executive officer of the newly-combined Management Energy.
“This transaction positions Management Energy as an early mover in the nascent West Coast coal export market,” Hanks said.
“Today China and India already account for nearly half of world coal usage and their needs are expected to increase substantially as these countries continue to industrialize. With our domestic thermal coal reserves exhibiting significantly higher heating values relative to traditional Powder River Basin coal, as well as the rights to low volatile metallurgical coal in Columbia and strategic transportation access on both continents, we have the assets in place to meet the growing demand for coal in China and India."
The company said its two metallurgical operations in Colombia both exhibit high-quality, low-volume coal characteristics.
One of those is set to begin production the first quarter of next year and is made up of 11Mt of reserves, while the other is permitted with a resource estimate of 40Mt and will likely be online in early 2012.